Binance experienced substantial net outflows totaling $3.64 billion after resuming withdrawal services following a major $6.3 billion hack, attributed to North Korean hackers. The outflows, representing 2.1% of its $171 billion in total assets, saw $4.65 billion withdrawn against $1.01 billion deposited on November 1st. Despite the challenge, Binance founder Changpeng Zhao reassured users, stating that 98% chose to remain, and the exchange has pledged to cover 95% of the stolen funds.
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Crypto giant Binance has faced a significant challenge, recording a net outflow of $3.64 billion as customers swiftly moved their funds off the platform after withdrawal services resumed following a colossal $6.3 billion hack. The incident, which has sent ripples through the cryptocurrency world, saw the exchange process a staggering $4.65 billion in withdrawals against $1.01 billion in deposits during a critical period on November 1st.
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These net outflows represent a substantial 2.1% of Binance's total assets, which stood at an impressive $171 billion as per its proof-of-reserves data from October 28th. While initial withdrawal volumes saw a dramatic spike, Binance reported that they have since declined and are stabilizing, with deposit volumes maintaining a strong presence.
The exchange initiated a phased restoration of withdrawals on Sunday morning, with services gradually coming back online across 15 networks and assets. Meanwhile, stablecoin issuer Circle, activating its incident response protocols, confirmed it coordinated with law enforcement to freeze over $1.1 billion in USDC linked to the security breach, an amount that surpasses the $800 million initially reported by CEO Jeremy Allaire.
Amidst the turmoil, Binance founder and former CEO Changpeng Zhao (CZ) took to X (formerly Twitter) to reassure the platform's users, stating, "98% choose to stay!" He acknowledged that the majority of the net outflows occurred within the first few hours of withdrawals resuming, emphasizing, "Trust isn't earned by what you say in good times. It's earned by what you do in hard times."
The massive $6.3 billion hack, which prompted these significant withdrawals, has been officially attributed by the FBI to North Korean hackers operating under the moniker 'TraderTraitor'. In a move to protect its users, Binance has committed to absorbing the entire financial impact of the stolen funds, ensuring that no losses are passed on to its customers. The exchange has successfully covered approximately 95% of the affected amount, up from an earlier 90%, and is actively working to source the remaining 5% which consists of less liquid tokens.
